Cases
Fédération des Caisses Populaires Desjardins de Montréal v. Canada, 2002 DTC 7413, 2001 FCA 27
The employees of the taxpayer earned vacation leave during a reference period running from May 1 to April 30 of each year. The Minister assessed...
Wawang Forest Products Ltd. v. The Queen, 2001 DTC 5212, 2001 FCA 80
If the taxpayer paid a logging contractor in full upon delivery to it of cut wood, it would be subject to liability to the workers' compensation...
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| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(e) | potential for holdback amounts not to be claimed did not render them contingent | 229 |
Buck Consultants Ltd. v. Canada, 2000 DTC 6015 (FCA)
The taxpayer sought to deduct during a rent-free period a portion of the rent payments that would become payable for subsequent rental periods....
Canada v. Robinson, 98 DTC 6232 (FCA)
A medical partnership comprised of 18 doctors leased its medical premises from a nominee corporation holding for a co-ownership of the doctors....
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| Tax Topics - Income Tax Act - Section 96 - Subsection 96(1) - Paragraph 96(1)(a) | doctors who leased their co-owned property to their professional partnership paid tenant inducement payment to themselves (no expense) | 338 |
Placer Dome Inc. v. The Queen, 91 DTC 5261 (FCTD), rev'd 92 DTC 6402 (FCA)
When an employee of the taxpayer with more than one year's service elected to contribute up to 6% of his salary for the year to a trustee who was...
Her Majesty The Queen v. Nomad Sand and Gravel Limited, 91 DTC 5032, [1991] 1 CTC 60 (FCA)
The operator of a sand and gravel pit was obligated under the Pits and Quarries Control Act to pay to the Ontario government a levy of 2¢ per ton...
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| Tax Topics - Income Tax Act - Section 9 - Accounting Principles | 91 |
The Queen v. Ken & Ray's Collins Bay Supermarket Ltd., 75 DTC 5346, [1975] CTC 504 (FCTD)
In respect of its 1969 and 1970 taxation years the taxpayer deducted management bonuses whose quantum was not ascertained until after the end of...
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| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(e) | 57 |
Aluminium Co. of Canada Ltd. v. The Queen, 74 DTC 6408, [1974] CTC 471 (FCTD)
Voluntary adjustments to the price of aluminium previously purchased by the taxpayer from its Jamaican subsidiary, which were made in order to...
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| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(b) - Capital Expenditure v. Expense - Improvements v. Repairs or Running Expense | 87 |
J.L. Guay Ltée v. MNR, 71 DTC 5423, [1971] CTC 686 (FCTD), aff'd 73 DTC 5374, [1973] CTC 506 (FCA), aff'd 75 DTC 5094, [1975] CTC 97 (SCC)
A general building contractor in accordance with the terms of its contracts with its subcontractors withheld 10% of the amounts invoiced on a...
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| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(e) | 77 | |
| Tax Topics - Statutory Interpretation - Certainty | 62 |
Time Motors Limited v. Minister of National Revenue, 69 DTC 5149, [1969] CTC 190, [1969] S.C.R. 501
The taxpayer, which was a used car dealer, issued credit notes in partial payments of used cars acquired for resale. The notes were not...
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| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(e) | 97 |
Rossmor Auto Supply Ltd. v. MNR, 62 DTC 1080, [1962] CTC 123 (Ex. Ct.)
The taxpayer made an interest-bearing loan of $50,000 to some customers (two related trucking companies) in consideration inter alia for their...
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| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(p) - Subparagraph 20(1)(p)(ii) | interest-bearing loans to tire customers | 100 |
See Also
Lewski v Commissioner of Taxation, [2017] FCAFC 145
On June 30, 1999, a trust of which the taxpayer was a beneficiary had a 40% (later reduced to 2%) interest in a syndicate (that entered into an...
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| Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(24) | an alternate resolution that the taxpayer was not entitled to an income distribution if Revenue denied a trust deduction made her entitlement contingent and non-includible | 374 |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(8) - Paragraph 248(8)(b) | since the taxpayer through her husband as agent had knowledge of an income distribution, her subsequent purported disclaimer was not immediate | 304 |
| Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(13) | a trust income declaration that was subject to a tax contingency did not result in an income inclusion to the beneficiary | 149 |
| Tax Topics - General Concepts - Agency | knowledge of agent imputed to principal | 217 |
Edison Transportation, LLC v. The Queen, 2016 TCC 80
A Florida corporation (“iTransit”) served as a vehicle procurement arm for a second Florida corporation (“Gameday US”), which was in the...
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| Tax Topics - General Concepts - Window Dressing | appearance of 3rd party ownership was window dressing | 111 |
Transalta Corporation v. The Queen, 2012 DTC 1106 [at 3044], 2012 TCC 86
Margeson J. accepted (at para. 101) that the stated capital (equal to fair market value) of shares which the taxpayer issued in payment of bonuses...
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| Tax Topics - General Concepts - Payment & Receipt | past services | 42 |
| Tax Topics - Income Tax Act - Section 7 - Subsection 7(3) - Paragraph 7(3)(b) | no bilateral agreement to pay bonuses only in shares | 229 |
Roth v. The Queen, 2005 DTC 1570, 2005 TCC 484, aff'd 2007 DTC 5222, 2007 FCA 38
The purported transfer by the taxpayer of an undeveloped project (i.e., of know-how he had developed with respect to a proposed LNG project) was...
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| Tax Topics - Income Tax Act - Section 15 - Subsection 15(1) | know-how not property | 79 |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Property | knowhow not propery | 85 |
Northwood Pulp and Paper Ltd. v. The Queen, 96 DTC 1105 (TCC), aff'd 98 DTC 6640 (FCA)
The estimated costs of reforestation work which the taxpayer became obliged to perform in future years when it harvested timber, did not form part...
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| Tax Topics - Income Tax Act - Section 10 - Subsection 10(1) | 50 |
Commissioner of Inland Revenue (New Zealand) v. Mitsubishi Motors Ltd., [1995] B.T.C. 398 (P.C.)
The trial judge was satisfied on the evidence that the taxpayer could make a reasonably accurate estimate that 63% of the vehicles sold by it in a...
Mara Properties Ltd. v. The Queen, 93 DTC 1449, [1993] 2 CTC 3189 (TCC), ultimately aff'd 96 DTC 6309, [1996] 2 S.C.R. 161
S.18(1)(a) could not apply to deny a loss realized by the taxpayer on the sale of inventory acquired by it pursuant to an s. 88(1) wind-up of its...
Coles Myer Finance Ltd. v. Federal Commissioner of Taxation, 93 A.T.C. 4214 (H.C.)
The taxpayer, a finance subsidiary, raised money through bankers acceptances (or "accommodation bills") and promissory notes having terms of no...
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| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Timing | 135 |
Co-operator's General Insurance Co. v. MNR, 93 DTC 303, [1993] 1 CTC 2316 (TCC)
Under the "experience rated" reinsurance treaties of the taxpayer, the annual premiums which it ultimately was required to bear in respect of each...
ISBA Construction Inc. v. MNR, 90 DTC 1940, [1990] 2 CTC 2491 (TCC)
A bonus of $180,000 which the taxpayer's board of directors declared at a time that the corporation was illiquid was contingent due to the...
Lawrence v. MNR, 90 DTC 1491, [1990] 1 CTC 2567 (TCC)
Fees of a notary for his services rendered in connection with the development and sale of MURBs legally were payable by the vendors of the...
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| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) | 68 |
Ensign Tankers (Leasing) Ltd. v. Stokes, [1989] B.T.C. 410 (Ch.D.)
At 477:
"'To incur' means 'to render oneself liable to'."
Dibro Investments Ltd. v. MNR, 87 DTC 210, [1987] 1 CTC 2281 (TCC)
Although the taxpayer was obligated to pay fees of 10% of its revenues to its franchisor, it withheld these payments in the taxation years in...
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| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(e) | 114 |
Edmonton Liquid Gas Ltd. v. The Queen, 84 DTC 6526, [1984] CTC 536 (FCA)
MacGuigan JA rejected the position of the Minister that amounts paid to a drilling operator in 1974 for drilling work to be performed in 1975 did...
Canada Packers Ltd. v. MNR, 68 DTC 682 (TAB)
Because the taxpayer's fiscal year ended in the last Saturday in March of each year, it was possible for it to pay holiday pay for two Good...
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| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(e) | 192 |
Administrative Policy
11 August 2020 Internal T.I. 2018-0782181I7 - Successored CCEE and Non-Capital Losses
After indicating that even though taking deductions under s. 66.7(3) to (5) from successored resource pools against income from successored...
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| Tax Topics - Income Tax Act - Section 66.7 - Subsection 66.7(3) | deductions of successored resource expenditures cannot generate a non-capital loss | 322 |
| Tax Topics - Income Tax Act - Section 3 - Paragraph 3(c) | s. 3(c) deduction (e.g., under s. 67.3) cannot generate a non-capital loss | 92 |
5 October 2018 APFF Roundtable Q. 16, 2018-0768871C6 F - Dépenses de bureau à domicile et d’automobile
Respecting the deductibility of home office and automobile expense of an independent contractor where such taxpayer owns the property and another...
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| Tax Topics - Income Tax Act - Section 13 - Subsection 13(7) - Paragraph 13(7)(g) | example of proration of capped s. 13(7)(g) capital cost | 157 |
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Undepreciated Capital Cost - A | capital cost of co-ownership interest | 74 |
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Depreciable Property | depreciable property must be owned | 78 |
| Tax Topics - Income Tax Act - Section 9 - Nature of Income | payment of taxpayer’s expenses by another might give rise to s. 9 or 80 inclusion | 199 |
28 October 2016 External T.I. 2016-0654331E5 F - Transfer of rights to income
An individual (A) sold leased land in Quebec to a non-arm’s length corporation of which A was not a shareholder on that basis that A retained...
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| Tax Topics - Income Tax Act - Section 9 - Nature of Income | where rental lands purchased subject to obligation to pay the rents to vendor, rents did not have quality of income to purchaser under s. 9 | 165 |
| Tax Topics - Income Tax Act - Section 56 - Subsection 56(4) | where rental lands purchased subject to obligation to pay the rents to NAL vendor, s. 56(4) trumps s. 9 to include rents in purchaser’s income | 169 |
| Tax Topics - Income Tax Act - Section 56 - Subsection 56(2) | s. 56(2) could apply to shareholder of purchaser of lands if vendor did not pay FMV consideration for retaining rights to rents | 168 |
5 April 2013 External T.I. 2012-0471151E5 F - Binding Agreement
Opco, which acquires an immovable, shortly thereafter agrees with an unrelated individual to pay 40% of the annual net rental income to the...
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| Tax Topics - Income Tax Act - Section 9 - Computation of Profit | side letter would not reduce owner’s entitlement to rents from property if not entered into at same time as property acquisition | 270 |
13 March 2012 External T.I. 2012-0433661E5 F - Notion de dépense engagée
Before noting that “the concepts of ‘outlay or expense incurred’ under paragraph 18(1)(a) can apply to expenses incurred for the purposes of...
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| Tax Topics - Income Tax Act - Section 118.2 - Subsection 118.2(2.1) | expense incurred if obligation has come into existence | 129 |
14 February 2012 Internal T.I. 2012-0435241I7 - Prepaid Rent and Escalating Rent Payments
escalating rents are not deductible by the tenant on a straight-line basis given that "the taxpayer is under no legal obligation to pay the...
13 April 2010 External T.I. 2010-0358941E5 F - CIRD - franchise
An individual, covered by an insurance policy, carried out renovation work following water damage in the spring of 2009 and thereafter was...
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| Tax Topics - Income Tax Act - Section 118.04 - Subsection 118.04(1) - Qualifying Expenditure | qualifying expenditure generally not reduced by insurance reimbursement | 111 |
16 June 2009 Internal T.I. 2009-0312851I7 - Deductibility of Average Rent for Long Term Lease
Escalating lease payments, which were deductible under GAAP on an average basis, would not give rise to a deduction for taxation purposes (to the...
28 June 2010 External T.I. 2010-0357081E5 F - Crédit d'impôt pour la rénovation domiciliaire
Can a qualifying expenditures incurred by an individual qualify as being incurred for home renovation tax credit purposes if a portion of those...
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| Tax Topics - Income Tax Act - Section 252 - Subsection 252(3) | HRTC administrative exception that separated spouses are not treated as spouses | 177 |
| Tax Topics - Income Tax Act - Section 118.04 - Subsection 118.04(1) - Eligible Dwelling - Paragraph (b) | ordinary inhabitation can commence at the end of the eligible period | 163 |
29 January 2010 Internal T.I. 2009-0339541I7 F - Inclusion au revenu et provision
Corporation A, which is involved in the distribution, warehousing, handling, and packaging of goods, invoices and receives revenue currently for...
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| Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(a) | advance fees for futures goods-handling services included in income under s. 12(1)(a) rather than s. 9 | 129 |
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(m) | reserve available for future goods handling services to be performed | 106 |
13 May 2009 External T.I. 2009-0314851E5 F - Frais d'administration, régimes de pensions
A registered pension plan agreement provides that the fees and expenses related to the administration of the pension plan and incurred by the...
26 August 2005 Internal T.I. 2005-0131171I7 F - Alinéa 18(1) e) de la LIR
A maintenance obligation to landlords did not give rise to a current deduction since no contractual obligation with specific counterparties had...
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| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(e) | no specific contractual obligation regarding maintenance obligation | 103 |
26 February 2004 External T.I. 2003-0045471E5 F - Prêt à un actionnaire
ABCco carries on a written communications consulting business and does not carry on a money lending business in the ordinary course of its...
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| Tax Topics - Income Tax Act - Section 15 - Subsection 15(2.4) - Paragraph 15(2.4)(e) | housing loan not excluded if comparable employees would not have received it | 208 |
| Tax Topics - Income Tax Act - Section 15 - Subsection 15(1.21) | inclusion of home-acquisition loan under s. 15(2) precluded a further inclusion under s. 15(1.21) | 122 |
14 July 2003 Internal T.I. 2003-0016677 F - BONIS A PAYER ET BENEFICES MARGINAUX
A verbal agreement was reached before the end of each taxation year that the corporation would pay bonuses to employees/shareholders based on its...
27 April 1995 External T.I. 9501685 - DEDUCTIBILITY OF RENT EXPENSE
Where, prior to the expiration of the original term of the lease, a renegotiated lease agreement is entered into which provides for a reduced rate...
11 April 1995 External T.I. 9414735 - DEDUCTIBILITY OF "NET SMELTER RETURN"
Discussion of whether net smelter return royalties paid under a mining lease are deductible.
93 C.P.T.J. - Q.42
Reclamation costs are recognized for purposes of the Act in the year they are incurred.
18 November 1992 Memorandum 921979 (December 1993 Access Letter, p. 407, ¶C9-286)
A reserve for vacation pay benefits earned by employees in the year that are reasonably expected to be taken in the following year represents...
16 May 1991 TI (Tax Window, No. 3, p. 30, ¶1258)
Whether a "management fee" paid by a partnership to one of its corporate partners is an expense or a profit distribution is a question of fact, as...
28 March 1991 TI (Tax Window, No. 1, p. 9, ¶1175)
Where a public corporation, which has made interest-free loans to its employees to enable them to acquire shares, subsequently forgives the loans...